On Tuesday, U.S. stock indexes closed mixed. The S&P 500 declined by 0.07%, the Dow Jones lost 0.37%, while the Nasdaq 100 edged up by 0.07%. These results reflect persistent investor uncertainty amid intensified trade rhetoric and interest rate expectations.
U.S. Trade Policy Back in Focus
Markets came under pressure following statements from President Trump, who emphasized that the U.S. would not extend the August 1 deadline for new tariffs to take effect. This raised concerns over potential inflationary pressure, which in turn could limit the Federal Reserve’s ability to ease monetary policy.
However, Trump later softened his tone, expressing openness to further negotiations and hinting that the tariff deadline might not be "100% firm," especially for countries willing to offer additional concessions. This helped mitigate the negative market reaction.
Rising Yields Weigh on Equities
The yield on 10-year U.S. Treasury notes rose by 3.6 basis points on Tuesday, reaching 4.415% — the highest level in two weeks. The increase reflects growing inflation expectations and weak demand at a $58 billion three-year bond auction, further pressuring the bond market.
A similar trend was seen in Europe, where German and U.K. government bond yields also climbed to monthly highs. This was driven by both inflation expectations and underwhelming macroeconomic data.
Tech Sector Remains Resilient
Despite overall weakness, the Nasdaq 100 managed to close higher, supported by strong demand for semiconductor stocks. Intel surged over 7%, while shares of GlobalFoundries, ON Semiconductor, Micron Technology, and others posted solid gains.
Energy companies also provided support. Rising oil prices drove up the shares of Devon Energy, Halliburton, Occidental Petroleum, Chevron, and others in the sector.
Sector-Specific Surprises
Chemical stocks rallied after the U.S. Environmental Protection Agency rolled back regulatory restrictions on 18 chemicals. As a result, shares of Chemours, Albemarle, Dow Inc., and LyondellBasell posted notable gains.
Positive rating revisions also supported select names. Stanley Black & Decker and Southwest Gas Holdings rose after analysts upgraded their recommendations.
Notable Decliners
Among the day’s biggest losers were Fair Isaac shares, down more than 8% after regulators announced a competing credit-scoring model would be allowed in the mortgage market. Other underperformers included Datadog, Newmont, JPMorgan Chase, and Bank of America, all of which were downgraded by major investment firms.
Outlook for the Coming Days
Investors are closely watching three key themes: the outcome of new tariffs, the start of the earnings season, and the Federal Reserve’s next steps. The minutes from the latest FOMC meeting are due Wednesday, followed by labor market data and speeches from Fed officials on Thursday.
Earnings expectations remain subdued. According to Bloomberg Intelligence, S&P 500 earnings for Q2 are projected to grow just 2.8% year-over-year — the weakest pace in two years. Only six of the index’s eleven sectors are expected to post earnings growth.
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